Discount retailer Five Below has removed its dedicated Five Beyond section for higher-priced items, a move that contributed to a 32.5% jump in net sales to nearly $1.3 billion in the first quarter, the company reported on Wednesday.
CEO Winnie Park told analysts on an earnings call that the change involved integrating products such as $15 mirrors and Bluetooth speakers into regular aisles, rather than keeping them in a separate area marked by a yellow banner. Comparable sales rose 22.7%, and Five Below raised its full-year sales forecast to between $5.4 billion and $5.48 billion.
Growth was particularly strong in games and toys, boosted by the viral popularity of “squishy” products, including a dumpling-shaped fidget toy. The company said it amplified the trend by increasing social media engagement and expanding its squishy lineup, though a mid-May in-store event had limited impact on quarterly results due to its one-day nature and constrained supply.
Park noted that customers have not resisted prices above $5 when the value is clear, adding, “The customers have definitely voted for it.” However, the trend led to smaller average purchases, with shoppers visiting more frequently but spending less per trip.
